The U.S. Congress has a hot mess on its hands. FEMA's National Flood Insurance Program at the beginning of 2017 was roughly $25 billion in debt. Then Harvey, Irma and Maria came along and that number is only going to get worse. The other problem is that getting FEMA to charge actuarially sound policy premiums for coverage that only goes up to $250,000 is a political non-starter. FEMA is exploring reinsurance options and there is some talk of debt forgiveness, but neither of these options really solves the NFIP's underlying problem which is that it is a federal program and not an actual insurance company selling flood insurance policies. One could view the above article as depressing in terms of further evidence of the huge coverage gap, or it could be view optimistically as there are a large number of potential customers out there that could be paying premiums.
Published by Bill McDavitt, Project Manager, water resource expert with hydraulic and time series expertise
The U.S. Congress has a hot mess on its hands. FEMA's National Flood Insurance Program at the beginning of 2017 was roughly $25 billion in debt. Then Harvey, Irma and Maria came along and that number is only going to get worse. The other problem is that getting FEMA to charge actuarially sound policy premiums for coverage that only goes up to $250,000 is a political non-starter. FEMA is exploring reinsurance options and there is some talk of debt forgiveness, but neither of these options really solves the NFIP's underlying problem which is that it is a federal program and not an actual insurance company selling flood insurance policies. One could view the above article as depressing in terms of further evidence of the huge coverage gap, or it could be view optimistically as there are a large number of potential customers out there that could be paying premiums.